TAX Update

Tax Update June 2020

Posted on 12 Jun, 2020
TAX Update

Instant Asset write-off of $150,000 has been extended to 31 December 2020

 

The instant asset write-off threshold of $150,000 for businesses with an aggregated turnover of less than $500 million will now be extended to 31 December 2020.

Without the extension, the instant asset write-off threshold of $150,000 would have reverted to the $1,000 threshold and eligible only to small businesses with a turnover of less than $10 million after 30 June.

Motor vehicle “Cents per Kilometre” Method Rate Change

The ATO will now raise the cents per kilometre deduction rate for motor vehicle expenses to 72 cents for the income year starting 1 July 2020.

The rate last changed in 2018 which saw the rate rise to 68 cents.

The cents per kilometre method currently allows taxpayers to claim up to a maximum of 5,000 business kilometres per car per year, without requiring written evidence.

Work-related car expenses have been on the ATO’s radar in recent years, with 3.6 million taxpayers claiming more than $7.2 billion in 2017–18.

According to the ATO, one in five claims is exactly at the 5,000km limit, with the agency’s analytics picking up unusual claims by comparing taxpayer claims with others earning similar amounts in similar jobs.

The impact of COVID-19 and government restrictions will likely be reflected in tax-time claims this year, with work-related car expenses claims expected to see a dip. It is important to note, if you have not used your car much or at all, you must ensure this is reflected in your tax return as we can expect a lot of Motor Vehicle expenses audits (regardless of claim method used) this year due to the ATO being under the impression Motor Vehicle use should have decreased significantly. it is also equally important you have the correct records to substantiate your motor vehicle claims. For more information on motor vehicle claims, please see the following ATO link https://www.ato.gov.au/individuals/income-and-deductions/deductions-you-can-claim/vehicle-and-travel-expenses/car-expenses/

 

Tax deductions for the year and in particular your Working from Home Expenses

 

With the End of Financial Year coming to an end, it is a good time to start working out your deductions for tax time. You may not realise how much you have spent throughout the year until you start putting your deductions together. To maximise your refund, it is important to remain organised and gather your receipts so we can process these and increase your refunds. With Covid working restrictions, many of you would have spent a lot more on your home office and working from home. It is a good idea to start locating and collating these receipts prior to year-end. It is also a last-minute chance to purchase any new items you require for work to put towards claiming in this financial year. For more information on deductions you can claim, please see the following link https://www.ctbspartners.com.au/news/work-from-home-during-covid

                                   Reminder: Super contributions deduction based on date Superfund receives them

 

A reminder, with the End of Financial Year nearing, you have probably noticed your Superfund balance go down due to the worldwide pandemic. it is a good idea to top up your super balance now to accelerate the growth and assist in your balance recovery, and you may also be able to claim a tax deduction for this. If you are looking to claim a tax deduction for this as well, now is a good time to make that contribution so your Superfund has ample time to process and confirm your contribution. Don’t forget, the tax deduction can only be claimed in this financial year if your superfund has received it this financial year. For more information regarding super, please refer to the following link https://www.ctbspartners.com.au/news/end-of-financial-year-superannuation

 

For further information, please contact our office.

 

CTBS Partners Pty Ltd